In 2022, the Bank of Cabo Verde (BCV) reported the sale of half its gold reserves, which amounted to EUR 27.4 (US$30.6) million .
According to the BCV’s annual report, the gold market experienced consistent devaluation from April to October 2022, with gold prices falling to 1,633.56 US dollars per troy ounce.
In 2021, BCV’s investment in gold reserves appreciated by 4.69% to EUR 51.6 million, with the volume staying the same at around one ton.
The BCV made its first gold purchase in August 2020, accounting for 6.68% of the institution’s total assets by the end of that year.
In 2022, Cabo Verde’s foreign exchange reserves constituted 72.3 billion escudos (US$734 million) distributed between gold and foreign assets.
The reserves rose by 5.44% from the previous year, primarily due to foreign exchange inflows from international card acceptances on the vinti4 network, international partnership disbursements, budget aid, and investment project financing.
This increase was slightly offset by the net sale of foreign currency to credit institutions, external debt payments, and other liabilities of the Cabo Verde State.
By the end of 2022, the foreign exchange reserves consisted of the euro (73%), the US dollar (18.28%), the Chinese yuan (4.19%), and Special Drawing Rights (SDR, 4.53%).
BCV declared the primary reason for the reserves’ reduction was the sale of 50% of its gold, a strategic decision made to benefit from favorable market conditions, refuge asset status, and the US dollar’s appreciation due to geopolitical tensions between Russia and Ukraine. On December 31, 2022, the international gold market price slightly decreased to 1,824.02 US dollars per troy ounce.